In-bundle versus out-of-bundle rates: What’s the difference on the price of data?

What’s the difference between in-bundle and out-of-bundle data rates? We unpack how you can save money when using mobile data on your phone!

In South Africa’s challenging data economy, access to the web is more or less defined by one’s ability to connect through a feature phone or smartphone. To do so, one usually connects to a 2G, 3G, or 4G/LTE network through a provider such as Vodacom, MTN, Cell C, or Telkom Mobile through a contract or prepaid offering or data bundle.

However, very few networks offer an uncapped or unlimited offering, leaving many to purchase data contracts (in which a specified data cap – such as 500MB – will be made available to a consumer every month next to a free calling and/or SMS allowance) or data bundles.

Data bundles refer to a package deal in which a consumer is offered an allotted capacity at a lower price; anything used within this package is charged at “in-bundle” rates. If a consumer doesn’t buy a package or exceeds the capacity they have purchased, the rate is referred to as “out-of-bundle”.

Generally speaking, the most affordable way to access mobile data is to purchase a data bundle. This allotted package gives a better deal in relation to how much money you’ll spend on a megabyte of data.

The principle works like this: Let’s suppose one purchases a R100 data bundle that provides 500MB of data. That means that you would be spending 20c on each megabyte of data. That is the “in-bundle” rate; mobile networks will reward users with a better price for purchasing an allowance of data each time.

Alternatively, if one didn’t have a data package active, you would pay what is referred to as the “out of bundle” rate. This means that instead of purchasing a package and benefitting from a lower price per megabyte of data, you would be spending more money per megabyte.

For example, Vodacom’s default out of bundle rate is R1 per megabyte of data received or sent, though certain older plans charge R2 for the same offering. Prepaid customers would pay R1.50 for one megabyte.

In-bundle versus Out-of-bundle

The general principle for South African consumers is that one can usually save money by purchasing a data bundle rather than using the out-of-bundle rate.

We’ll use an example to illustrate how one could save money: Let’s pretend we have a Samsung Galaxy J1 Mini on contract from Vodacom. Each month, we receive 75 minutes of call time, 200 SMSes, and 200MB of data for R179 per month.

Unfortunately, in using the phone we exceed our allotted R200MB of data. That means from this point onward, we’ll be charged the out-of-bundle rate. Pretending we use 500MB of data, that means we can be charged R1 per megabyte – another R500 at the end of the month. Ouch!

However, to avoid that we can load a data bundle on our phone and benefit from a reduced price. If we purchased a R500MB bundle for R99, that would mean we spend roughly 20c per megabyte. Instead of paying R500, we can pay R99 and save ourselves R400 odd Rand in the process.

Exceptions

There are a few exceptions to this idea. If you don’t have a contract and instead use prepaid data, your allowance will expire once you’ve used your cap and you will not be able to browse the internet or send a WhatsApp. You’ll have to purchase another data bundle over a counter or from your phone to access the internet again, or you can choose to buy directly from your phone from which the amount you specify will be deducted from your airtime.

Let’s say you start each month with R150 airtime, and want to buy R99 data for 500MB. If you proceed, you’ll end up deducting R99 from your R150 airtime, leaving you with just 51 odd airtime left to call or SMS your friends or family. In this regard, it’s a better idea to pay cash – if you can afford it – as you run the risk of compromising how much time you’ll be able to use to communicate over your phone through calling and messages.

Once-off data bundles (if you own a tablet, for instance) work on a different principle. If you purchase, let’s say, R100 worth of data, you will be credited that amount to use until you exceed that point. Once you’ve used it, you will no longer be able to access the internet and the out-of-bundle rate won’t apply.

Have your say!

As #DataMustFall protests continue in South Africa, what are your thoughts? How could data be made most accessible, and what network do you prefer? Listen in to the latest episode of our podcast, Bandwidth Blog On Air, where we unpack how #DataMustFall could change the mobile landscape in South Africa:

Disclaimer: No mobile network, ISP, or data provider was involved in the production of this article.